The MP for Southwark North and Bermondsey cleared the way for a bid when he said yesterday that he would not put his name forward for the mayoral job. Although he did not formally announce his intention to stand, he told The Independent what he would do if the leadership was his.
He would not tear up Mr Ashdown's deal with Tony Blair over closer co- operation, but would "call a pause" after the election. He would not accept a seat in a Labour government - which Mr Ashdown was prepared to do - unless the number of Liberal Democrat MPs was greatly increased.
"It would be wrong for any new leader to tear up the arrangement we have for this parliament. It is a contract ... The issue is what position a new leader will take after the next election, and that should be open for consultation with the party."
Mr Hughes, who has to abide by rules forbidding a formal bid for the leadership until after the European elections in June, also said he would be prepared to work with "progressives", Labour or Tory.
On Britain's entry to the single European currency, he said the Liberal Democrats would back Labour in getting legislation through the Commons, against anti-European left-wing Labour MPs if necessary.
On taking a seat in a Labour cabinet, he said: "Unless you have a legitimate balance between the size of the two parties then it is dangerous for a small party, in terms of seats, to do a deal with a big party."
Charles Kennedy, front- runner for the Liberal Democrat leadership, has the backing of grandees, led by Lord Jenkins of Hillhead and, in spite of Downing Street denials, it is claimed he would have Mr Blair's support to continue the modernisation "project" with Labour. Mr Kennedy has the edge with his high public profile but Mr Hughes will seek the support of the party rank and file, who have a one-member one- vote ballot.
Mr Hughes, the health spokesman, plans to mount his challenge with a policy pamphlet focusing on public services. Under his leadership he would seek to make the Liberal Democrats the party of opposition instead of the Tories.
Mr Hughes's move ends speculation about his intentions to become the Liberal Democrat candidate in May's London election. As a popular London MP, he was viewed as his party's best hope for winning the contest for Britain's first directly elected mayor.
But he indicated that Mr Ashdown's decision to stand down had forced him to change his mind.
"I will this summer be involved in a party leadership election, whether or not as a candidate I would not be able to commit myself wholeheartedly to either campaign if I tried to be involved in both," he said.
Mr Hughes is seen as the standard-bearer of the left wing of the Liberal Democrats and has warned of the dangers of Mr Ashdown's strategy of closer co-operation with Labour.Reuse content